Poll: Prop. 13 should be reformed

A new poll shows 56 percent of likely voters favor removing commercial properties from Proposition 13’s tax protections, meaning commercial land owners would have to pay based on current assessments. But as much as many Democrats would like such a “split roll” – homes would continue to be sheltered – it’s unlikely to happen in the near future.

Polling numbers are all over the map on the issue. A 2011 Field Poll found just 41 percent of voters favored removing commercial properties, while a 2012 USC survey found 59 percent “strongly” or “somewhat” favored such a change when applied to “large” commercial properties. So the 56 percent result found in a poll released Wednesday by the Public Policy Institute of California seems to be a soft number.

It gets even softer when you consider that such a proposal would have to go before voters and face a well-funded barrage of campaign ads from the wealthiest commercial property owners in the state. The TV ad might go something like, “Businesses are just the first step for greedy Sacramento lawmakers, who next will want to raise the taxes on your home.”

We got a small taste of business muscle when a more modest measure to increase property taxes on some businesses was introduced in 2011. Three dozen corporations and business groups – including the California Chamber of Commerce ­– launched a coordinated lobbying effort, and the bill died a quick death.

Lenny Goldberg, executive director of the California Tax Reform Association, advocates the split roll. But even Goldberg says it will take years to educate the public sufficiently to overcome opposition from business.

Corporations targeted

That doesn’t mean that commercial properties are off the hook. A measure before the Legislature, AB 188, is aimed at closing a huge loophole that costs the state $6 billion annually, according to Democratic Assemblyman Tom Ammiano, the bill’s author.

Prop. 13 allows the taxed value of the property to increase no more than 2 percent from the assessed value at the time it last changed owners. However, commercial properties don’t technically change owners under Prop. 13 unless a single individual acquires more than a 50 percent stake.

For instance, billionaire computer magnate Michael Dell bought the beachfront Fairmont Miramar Hotel in Santa Monica in 2006.The price was $200 million, but the taxable value continues to be based on the 1999 assessed taxable value of $86 million, saving Dell $1 million in taxes annually, according to a Los Angeles Times report. Dell managed that by dividing the ownership stake between himself, his wife and two of his investment advisers, so no one had a 50 percent stake.

Ammiano’s bill closing that loophole would not need to go to voters – it would just need two-thirds approval of the Legislature, where Democrats hold a two-thirds majority.

More local taxes?

The PPIC survey, which found that 60 percent of voters said Prop. 13 was “mostly a good thing,” explored tweaking another aspect of the 1978 measure – one that would make it easier for cites, counties and school districts to levy new taxes.

Local voters can now approve a special property tax on themselves with two-thirds of the local electorate. Measures in the Legislature would lower that two-thirds requirement to a simple majority for, variously, libraries, transportation projects, community development and public safety. If any of those measures are approved by the Legislature, they have to be approved by voters statewide for the lower threshold to become law.

When asked generically about lowering the local threshold, 53 percent of likely voters were opposed.

So, dead in the water? Not necessarily.

In 2000, voters approved Proposition 39, which reduced the local tax threshold to 55 percent for local school-construction bonds. And unlike proposals focused on commercial properties, the local tax change doesn’t have well-funded opponents.

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